POLICY BRIEFINGS

Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.

Appropriations Issues

This Wednesday or Thursday the House is scheduled to take up H.J. Res. 79, a continuing resolution (CR) that includes agency funding at the rate set in the debt limit law which caps FY 2012 spending at $1.043 trillion. Funding would continue until the first of the following occurs: (1) enactment of an appropriation for any project or activity provided for in the joint resolution; (2) enactment of the applicable appropriations Act for FY2012 without any provision for such project or activity; or (3) November 18, 2011. Several individual appropriations bills could yet be enacted this year: the Agriculture/FDA bill has passed both the House and Senate and has the Military Construction/VA bill. The Defense bill will likely be taken up, but it does not appear the Labor/HHS/Education bill will be marked up in the House. Passage of the CR by both the House and the Senate would clear the decks to enable both houses to recess the last week of this month.

Senate HELP Committee Hearing on Health and Poverty

At a Senate HELP Committee hearing last week, “Is Poverty a Death Sentence?”, Senator Bernie Sanders said that “poverty in America today leads not only to anxiety, unhappiness, discomfort, and a lack of material goods. It leads to death.” Senator Rand Paul, however, argued that instead “capitalism in our country vanquished starvation along with smallpox and polio….Anyone who wishes to equate poverty with death must go to the third world to do so. Anyone wishing to equate poverty with death must seek out socialism and tyranny. Where you find command economies you will find death and starvation.” IOM statistics were cited that showed 45,000 Americans die every year because of lack of health insurance. The hearing is a prelude to the coming debt reduction committee debate over whether and how much Medicaid and Medicare spending should be reduced to help balance the federal budget.Joint Select Committee on Deficit

Reduction Gets Advice on Spending Cuts

The deficit reduction “super committee” heard testimony from CBO Director Douglas Elmendorf who said that any tax increases and spending cuts should be phased-in over the long term, given the current state of the economy and high unemployment rate. He said that spending on Social Security and federal health programs is projected to increase to 12.2% of GDP in 2021 under current law, up from 10.4% in 2011. Senator Rob Portman maintained that entitlement spending is driving long-term deficits to impossible levels while Senator John Kerry countered that it’s more than a spending problem with many tax “expenditures” being spending in disguise. The CBO Director said the committee’s recommendations could follow several paths, including raising federal revenues significantly above their average share of GDP, making major changes to entitlement programs or substantially reducing the role of the rest of the federal government relative to the size of the economy. The President’s “Americans Jobs Bill” will be brought into the committee’s purview by Democrats while Republicans are likely to resist many of the direct spending programs and the bill’s payfors which include increasing taxes on higher income individuals and families. Senate Minority Leader Mitch McConnell said “The President can call this [jobs] bill whatever he wants. But in reality, all he’s really doing is just proposing a hodgepodge of retread ideas aimed at convincing people that a temporary fix is really permanent and that it will create permanent jobs. And then daring Republicans to vote against it….” House Speaker John Boehner reiterated Republican opposition to tax rate increases and advocated for major tax reform with lower rates and the elimination of various deductions. The President will also forward to the joint select committee his recommendations for long-term deficit reduction which are likely to include minor adjustments to the Medicare and Medicaid programs. The recommendations may also address the need to ameliorate the scheduled 29.5% reduction in Medicare physician payments beginning next January. Other suggestions for deficit reduction may also be forthcoming from the so-called “Gang of Six.” Reducing health care fraud and abuse was a topic promoted by several committee members and the CBO Director pledged his support to find solutions, but cautioned that it is unlikely any savings will be substantial. The committee’s deadline for finding solutions is November 23, but CBO said they would need 2-3 weeks to score the proposed legislation, thus forcing the committee to come to some resolution during the remainder of September and the weeks in October. If the committee lacks a majority consensus, then automatic cuts of $1.2 trillion over ten years would take place under both defense and non-defense spending programs. CBO said that the 2% cap on Medicare cuts under the sequestration would amount to about $123 billion of the total. House and Senate committees of jurisdiction are also anxious to weigh-in with their own recommendations, the first being the Senate Defense Committee which urged DOD to provide the defense committee with the Administration’s recommendations for $400 billion in defense cuts. Outside groups have begun their lobbying for certain changes with the latest being the Healthcare Leadership Council which suggested $410 billion in Medicare savings over 10 years by establishing an insurance exchange under which beneficiaries could use vouchers to purchase coverage, raising the Medicare eligibility age from 65 to 67, overhauling deductibles and copayments and making changes to the medical liability system.